Better Buy: Costco vs. TJX Companies

While both Costco (NASDAQ: COST) and TJX Companies (NYSE: TJX) can be considered "discount" retailers and both derive at least a portion of their sales from selling clothing, the two companies are fundamentally different. One has become a leader in membership-based warehouse retailing, while the other specializes in helping customers access off-price apparel and home goods.

The two operations do share one intriguing commonality. With a constantly shifting array of merchandise, both retailers explicitly promote a "treasure hunt" experience in their stores. This can serve as a competitive advantage as it gives customers a reason to repeatedly visit the physical stores.

Investors tend to focus on a different kind of treasure hunting, and the critical question for them is which retail stock offers more potential for gains. Let's take a closer look at these two companies to see which one is the better buy.

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Source Fool.com